Two Tax Credits for Alternative Fuel Fleets Extended

March 2, 2018

If you manage a green fleet, Congress has given you some good news to use.

The Bipartisan Budget Act of 2018 (2018 BBA) passed by Congress and signed into law on February 9, 2018, extends two tax credits that affect fleets using alternative fuels. The Alternative Fuel Excise Credit and Alternative Fuel Infrastructure Tax Credit are now retroactively extended through the end of 2017. They were originally written to expire December 21, 2016.


Alternative Fuel Infrastructure Tax Credit

Fueling equipment for natural gas, propane, liquefied hydrogen, electricity, E85, or diesel fuel blends containing a minimum of 20% biodiesel installed through December 31, 2017, is eligible for a tax credit of 30% of the cost, not to exceed $30,000. Permitting and inspection fees are not included in covered expenses. Fueling station owners who install qualified equipment at multiple sites are allowed to use the credit towards each location. Consumers who purchased qualified residential fueling equipment prior to December 31, 2017, may receive a tax credit of up to $1,000.

Alternative Fuel Excise Tax Credit:

A tax credit in the amount of $0.50 per gallon is available for the following alternative fuels: natural gas, liquefied hydrogen, propane, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and compressed or liquefied gas derived from biomass. For propane and natural gas sold after December 31, 2015, the tax credit is based on the gasoline gallon equivalent (GGE) or diesel gallon equivalent (DGE). Tax exempt entities such as state and local governments that dispense qualified fuel from an on-site fueling station for use in vehicles qualify for the incentive.

The U.S. Department of the Treasury (Treasury) will issue guidance for how to submit claims by March 11, 2018. Claims may be submitted for a 180-day period beginning no later than 30 days after Treasury issues guidance, and claims will be paid no later than 60 days after receipt.